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Pebble CEO explains why he sold to Fitbit (backchannel.com)
264 points by steven on Dec 12, 2016 | hide | past | web | favorite | 200 comments

Pebble crowdfunded as an alternative to venture capital. Their huge success on the platform was an inspiration to so many other hardware startups that it sparked an entire generation of products (in my opinion). Kudos to that.

I still wear my original Pebble. It's reliable with very long battery life, and is one of the very few wearables that works well while wearing gloves.

I think the problem with crowdfunding (and early adopters in general) is that product hype can be a product unto itself. That's part of the value that Kickstarter provides, but it disappears when a product hits the wider market, and all that's left is the actual value of the product.

Wearables will gain more traction when wearing them actually enhances their value (fitness trackers that measure your pulse, VR headsets glasses that change what you see).

Smart watches, unfortunately, were just redundant. The entire idea of a smart device is that it has everything you need on one device. Carrying two smart devices makes no sense, and the phone got here first.

I have a Pebble Time Steel, and I couldn't disagree more about it being redundant..

I don't care about apps or watch faces or any of that stuff.. I use it for (1) notifications and (2) the calendar timeline..

Being able to glance at my wrist when I get an email or a phone call (or any notification) without having to fish my phone out of my pocket, especially in the winter when it's deep inside my coat, is invaluable.. I can quickly decide "do I need to deal with this right now" (which for me, during the work day, is important).

Being able to tap the down button and see the next thing in my calendar (or the thing after that, etc) is also super useful.

For me personally, that's the killer app, and it's why I am so sad that Pebble is gone, because their calendar timeline was innovative and super useful (to me at least), and combined with quickly checking notifications, made my Pebble Time as essential as my wallet when leaving the house.

Also, it looks great.. Better than any other smart watch that provides the same functionality.. And the battery lasts for a week..

Ok I'm going to stop, because now I'm just bumming myself out that my Time Steel 2 will never arrive.. :-(

Totally agree. I haven't owned a Pebble, but I have been wearing a Microsoft Band 24/7 for over two years and really depend on its functionality now. Quickly scrolling through email, texts (and occasionally replying), calendar, stocks - all from a quick to use interface is a real time saver. It also tracks my sleep every night and wakes me up in the morning in an unobtrusive way that my partner appreciates (no more alarm clock/phone alarm). I also track my steps, heart rate, and workouts every day, but the fitness stuff is a bonus to me and I would still find the Band very useful without it. Unfortunately, it looks like the Band has been abandoned by Microsoft, so like you I'm a little bummed out and will have to start looking at alternatives (once my supply of Bands runs out anyway...)

>> Carrying two smart devices makes no sense, and the phone got here first.

I've always believed the watch will replace the phone. It's easier to carry than a phone. I would replace my iphone with a smartwatch in a heartbeat but unfortunately the current models are too limited: no 4g/lte, poor battery, no carplay, not easy to read data(i.e emails), too bulky etc. The main issue is that the watch is just not good enough for now but eventually it will get a big chunk of the marketshare.

The biggest limitation is the screen size. Watches could arguably be made to do everything we want, but we'd still need to plugin an external screen. I'd like to see someone give an futurama style armband a go.

With an armband you lose a hand for interaction. But I agree that screen size will forever be the watches' undoing. Where they will excel is any segment that has an item you have to mindlessly carry on your person all day: security badges, wallets, door keys, insurance trackers, health-device controls. Everything else will stay on phones or similarly-sized devices.

You could in theory just have a very thin remote display with the "brains" inside of the watch. In theory that display could be made much cheaper so you have no/less concerns about dropping/breaking/losing it. Pretty hard to misplace a watch that's always on your wrist.

> With an armband you lose a hand for interaction.

Absolutely true.

What you gain is (some are more or less debatable and/or situational):

1) Stability. The device cannot be knocked out of your hands or dropped, unlike 5" phone. I can give you two situations where this is very safe where a phone isn't: in a store, and on a bike.

2) 24/7 on you, with the advantages you mentioned.

3) Less chance of the device getting grabbed out of your hands. If the device looks like a normal watch (and not like an Apple Watch) the chance of getting robbed for your watch stays approx the same.

4) Information leaking. Phone has this too. Phone has larger screen, watch with t-shirt is 24/7 seen.

> With an armband you lose a hand for interaction.

I think the comparison being made was between armbands and smart watches, not armband phones vs. regular phones. I don't know about you, but I _certainly_ can't use both hands to interact with a watch on my wrist.

> he comparison being made was between armbands and smart watches

Well, we were talking about watches completely replacing the phone, then saying you need a bigger screen for that, so at that point I think it's legit to compare "a watch with phone-like screen" vs regular phone.

This would probably work better with a thinner, smaller smartphone.


What ever happened to picoprojectors?

You mean the Cicret? That was bullshit.


Or the more realistic kind that project on a wall in a dark room?

I mean TI's DLP-based picoprojectors that were supposed to be built into phones.

They are still around. The user experience is less then optimal.

Has anyone figured out how to integrate a camera into a watch? Nobody would replace a phone with a device without a camera.

I used to work in the phone industry and there actually is a niche of people willing to pay a bunch of money to get a device without a camera, usually because they work in some high security area.

There's the CMRA which adds cameras to an Apple Watch band: http://www.recode.net/2016/11/2/13489812/glide-camera-apple-...

I totally would almost all the time. I use my phone's camera maybe once or twice a week, otherwise its just a useless extra, and I know the occasions on which I'm going to want a device with a camera so I could easily plan for them and take my phone (or a real camera) with me.

That sounds like a minority use case- most people take pictures with phones these days, unless they're professional or amateur photographers.

I have a nice camera with good lenses, filters, etc., but I nevertheless probably take more photos with my phone: it's the camera that's always in my pocket, any time I see something interesting.


Also, I take way more pics of the kids with my phone than my dSLR simply because I never know what they'll do next and I always have my phone with me.

The original Samsung Galaxy Gear[0] had one, but it was very low-resolution and kind of creepy[1].

0: http://www.samsung.com/uk/consumer/mobile-devices/wearables/...

1: even the marketing video has a guy taking creepshots: http://www.theverge.com/2013/12/22/5235278/samsung-awkward-g...

Samsung did. Search this page for my username, another comment has the link (somewhere around this indent level).

I got a Moto 360 Sport for <$100 on black friday and at that price point it's proven pretty useful for me as a general secretary and meeting tracker. That said, I would say it absolutely fails that "good enough" test - most of its useful functionality just moves Google Now to my wrist. It is helpful to see if I am being urgently hailed during a meeting or while out of the office, but again, I can't fathom it ever being worth its original asking price of $300 with those limited use cases and its assortment of small, frustrating problems.

Dick Tracy wasn't carrying around a lump of plastic in his pocket.

It's just a shame that when we get to the point of having all the world's intelligence accessible to us instantaneously, it's going to be mediated through institutions that are actively selling us out to the prison system.

You can't take photos and videos with watch.

Samsung's first iteration of the Gear had a camera, IIRC. I also recall the picture quality was reported to be about as good as you would from a device that size.

(Ah, here we go: http://www.androidcentral.com/samsung-galaxy-gear-camera-sam...)

Well -- they also raised ~$15MM right after they finished their crowdfunding campaign.

Yes, but... During YCombinator they weren't fundable, so they tried crowdfunding. The article mentions that they crowdfunded a SECOND time because they were unable to raise another round of funding.

>Pebble crowdfunded as an alternative to venture capital. The last time it was out of necessity, because there were no investors interested. And the way they did crowdfunding was basically selling their product at a steep discount, basically leaving a lot of money on the table. I don't know if that was a good strategy.

It's understandable you want to offer attractive perks with your Kickstarter, but at that time the Pebble brand among tech enthousiasts was big enough to limit the discount and stress the early adoper angle. You have several thousands of customers eagerly waiting for your next generation product, in that case there's no need to give steep discounts in the perks.

I guess the Pebble management was too focused to make the last Kickstarter another well-publicized runaway success, so that they could use that success to convince investors once again. But in the process they discounted their product, their brand and ultimately their chances of survival.

Not sure I agree with you, you're saying there's no value dropping the prices.

What the crowdfunding platform was able to do for them was to gamify the process, and reward early adopters. It's part of the reason why they have a great community behind them. They treat their early adopters well.

I'm intrigued, can you list any successful members of this generation of products inspired by Pebble?

I think in some ways this should be a wake up call for Kickstarter, Pebble was their biggest success story until now.

There are thousands, maybe 10s of thousands. My product company is one of them, www.therooststand.com. In my sphere, I know 10+ KS creators running healthy businesses, most bootstrapped, that started with Kickstarter. TC article on my story and Eric's influence: https://techcrunch.com/2013/07/05/roost-laptop-stand/

I also know a few creators that didn't find profitable distribution models and/or demand post Kickstarter.

I also know a few creators that failed to execute production and folded before delivering rewards.

^^^^^ These sound like fates of business of all types started from many different sources of capital.

I do know the path Eric and Pebble carved was inspiration to all the above. And many feel indebted.

It's very sad news on Pebble, tho 'shock' is not the right word for it, as many of us physical product KS creators know too well the risks of development, tooling up, cash flow, and managing delivery expectations. It is a high stakes game.

We had a crowdfunding success that was largely inspired by the marketing strategy of the Pebble campaign. I'm sure thousands of others were too.

How about the Coolest Cooler? You don't think they were inspired by Pebble? Or the Ubuntu phone?

> Apple’s emphasis on fashion and Pebble’s on productivity and third-party innovation were costly detours—the smartwatch market is rooted in health and fitness.

that's depressing :( i was hoping that they had just misexecuted, and someone else would step in and fill the niche of "e-ink watch with long battery life that is geared towards displaying things your phone sends it"; i have no use for fitness tracking and biometrics, and pebble's featureset and reasonably open ecosystem was ideal for me.

the saddest thing is that even buying used pebbles on ebay won't help me much with their servers going offline :(

"even buying used pebbles on ebay won't help me much with their servers going offline"

...and this is the failure of the IoT in a nutshell.

So true. When I first read about IoT, about a decade ago, I thought of it as a miniaturized and decentralized, semi-autonomous client and server systems design.

The fundamental problem of the current take on IoT is a misunderstanding of the internet part. Our systems should be decentralized and find routes to nearby systems that are available. So, to be an active actor within the arena of pico-net, local net, internet. Currently, most IoT systems mostly connect to some central, unprotected server hosted in <insert-cheap-labor-country-youve-never-heard-of>.

May I introduce you to AllJoyn [0]? Proximal (broadcast domain) IoT. It's baked in to Windows 10, LiFX bulbs, a bunch of TVs... [1] It's being folded into OCF now, but the open source will live on. Don't need a gateway, don't need a server.

[0] https://alljoyn.org

[1] https://allseenalliance.org/certification/certified-products...

ETA: Disclosure: worked for Qualcomm/AllSeen Alliance for years on AllJoyn

I've looked into AllJoyn, but honestly it has a very outdated and over-complicated design. It's also not really suited to running in low-power devices due to its roots in DBus. IoTivity might be better but I doubt it will get much support even when they do finish it - Apple and Google have such a huge advantage in this space from owning mobile OSes (and Google Home) that I can't see anyone else gaining much traction.

I think Weave will probably win this battle. It is tied to Google, but less so than Homekit is to Apple and it doesn't have the insane MFi requirements. Also the (draft) design seems quite nice. They just need to hurry up and finish it.

Interesting. I noticed the LiFX bulbs before via OpenHAB. Seems to tick a lot of good checkboxes and I will certainly look into it more.

My rant about IoT was obviously pointed at the useless IoT toys currently flooding the market.

I'm hoping someone will make the AllJoyn protocol accessible for a weekend project. As it is right now I can't make heads or tails of what I need to onboard a simple LIFX bulb. It seems like I have to spin up a whole Java enterprise-ish project when all I want to do is send some packets to it's virtual access point with my wifi creds in them.

Do you know if there's any documentation on the low-level protocol that doesn't involve using the big SDK? I'd love to just write a python (or similar) script to do this grunt work.

Morten Nielsen [0] has written quite a few small packages around AllJoyn on Windows [1]. There is a JavaScript binding [2] which also might help. There was a Node binding [3] but it doesn't look like it's under active development. ASA stopped shipping SDKs some time ago because the juice just wasn't worth the squeeze.

[0] https://github.com/dotMorten

[1] https://github.com/dotMorten/AllJoynLightingController for example

[2] https://cgit.allseenalliance.org/core/alljoyn-js.git/summary

[3] https://www.npmjs.com/package/alljoyn

As programmers we learned decennia ago that it is not wise to depend on a stable network/server; we forgot this again because 'internet works everywhere', so apps, IoT etc all depend on having internet all the time, it being fast (example; some airline apps; when you search for a flight and the internet is slow/dodgy, they'll tell you they did not find any results while the web version just waits and then actually works; the reverse would be far more logical) etc. Many apps, without any reason, do not work (well) at all without internet and/or their server and/or network and most IoT devices do not either.

Turns out decentralized is not as profitable as walled-garden cloud service with recurring subscriptions fees. Bummer--I too wished for your version.

IoT, from a business perspective, is generally about analyzing IoT-collected data. To do that, you need access to the data. There's no reason to make an IoT device if it's not going to collect data for you to analyze.

Well, that's good for them, I suppose, but why is anyone else supposed to care? You actually have to do better than the status quo before you can use your fancy new automated product as a hook for convincing people to let you snoop on their lives, and it's hard to imagine very many snoop-on-people's-lives-based businesses investing enough R&D into their complex replacements for everyday products to reach that threshold.

I don't even know why people want smart watches or touch-screen monitors but people buy them (and apparently love them.) I'm sure there's a whole planet full of people who will by IoT dice and IoT ice cubes and IoT nail clippers and whatever other shit someone wants to make.

There's probably someone emptying their dryer right now dreaming about preparing a slide deck for a new IoT lint catcher startup. I've recently read a proposal for using block chain to try to track whether children have done their homework, so I willing to believe anything right now.

Haha I learned through longtime use of public laundries that you have to empty the lint screen every time. It's my impression that only those who have only used their own private dryers make this mistake often enough to require an IM from their IoT lint device. Still that might be a big enough market?

...just kidding! Rather than convincing anyone to spend three figures on an IoT lint device, any marketing campaign would just convince them to just check the damn screen!

Then there's no reason for me to buy said IoT device.

Cannot agree more.

> the saddest thing is that even buying used pebbles on ebay won't help me much with their servers going offline :(

Thankfully, the community is stepping up to fill that gap: http://rebble.io/

wonderful, hope it gives the used pebble ecosystem a new lease of life!

Yeah, it's been a bit vague on whether Fitbit is going to keep the servers alive, although the article hints towards it. People on /r/Pebble have been working on an open source community store to keep the ecosystem alive.

I thought Pebble really nailed balancing the engineering tradeoffs that go into a smartwatch, but I guess it didn't translate into mass market appeal. It's surprising how quickly things turned after the modest success of the Pebble Time.

I'm hoping to eventually transition to a "hybrid" watch. I just want something that looks good and tells me when there's something to look at on my phone. Currently, though, it looks like those watches are kinda crappy. Plus, they are going all-in on fitness as well. :(

The pre-installed apps are pretty good. They only third party pebble apps I've installed are watch faces. The built in faces are good enough. I anticipate being able to use my pebble for as long as I can keep the android pebble app running.

there is already a project for replacing the pebble store

There's only three things I want in a smartwatch:

1. Resemble an actual, reasonably sized watch.

2. Display notifications from my phone along with their actions (such as marking an email as "Done" in Inbox, or liking a Tweet).

3. Allow me to respond with my voice for notifications that support quick replies.

The Pebble Time Round was great at all three, and (as far as I know) was the only watch to have the features that I wanted in a form factor that resembled a reasonably-sized watch. The only other alternatives currently are Android Wear watches, all of which don't look like the kinds of watches I like to wear (they're thick, with large bezels and superfluous embellishments).

If I knew for sure that a Pebble Time Round would continue to be useable for the next six months, I'd buy one in a heartbeat, but the uncertainty makes me hesitant to spend the $100+ on one.

Fitness, Apple Pay, Siri.

These are the killer apps for smart watches. Pretty much everything else the Apple Watch does is a waste of time, just replicating functionality that is easier and better experienced on your phone.

The Apple Watch (and others) are trying to solve a bunch of other non-problems that don't exist for 99% of the real world.

They would be better products if they had less features.

> Fitness

I don't want or need a fitness tracker. Judging by other comments I'm not the only one.

> Apple Pay

...is not supported in most places where I live, so it's a gimmick at best.

> Siri

Maybe I'm weird but I don't find voice input acceptable in social situations and don't want to rely on speech recognition when it comes to technical terms or mixed language input (I'm not in the US).

For me "a controlled subset of your smartphone's notifications on your wrist" is the killer app. Everything else is a gimmick.

The Apple watch recently obtained a means to reply to messages by means of handwriting recognition. This works rather well in practice and I find I'm able to send short replies quickly and easily in situations where speaking to the watch would be inappropriate (e.g. on a bus).

I find Siri very useful indeed for one thing in particular, which is to set reminders. This has been a very useful feature of smartwatches, and I might even consider it a "killer app". Other than that, sending some messages from the watch and setting timers I don't use Siri.

I would agree about the utility of watch notifications. For example, if my Nest camera spots a human figure on my property I get a photograph of them turn up as a notification on my watch, which is awesome.

The fitness tracking is of little interest and not really very useful given my main sporting activities involve sparring - blocking punches is not an activity which suits wearing an expensive watch.

I find it funny that reminders are go-to thing that everyone talks about when mentioning Siri.

Can it do ANYTHING else well? Especially if you're outside USA?

I don't know and I'm not particularly bothered to find out since I don't want to use it for anything other than reminders, timers and the occasional text message.

When I was using Android Wear and Google Now that was all I wanted; the rest of Google Now was far too much of a nuisance. If Pebble could have handled reminders as easily I'd have been using that instead.

Agreed. I would also add a silent vibrating alarm to the list. Though interestingly, non of these features need much of a display or interface.

I have a Mi Band 2 with a 1 month battery life. It does everything i Ned. I'm pretty sure all of the above features would be possible with the Mi Band display, at a very low price.

I think smartwatches will split inyo fashion (Apple) vs Utility, depending on whether Google or Microsoft figure oit payments and assistants.

You mustn't have looked at Android watches in a while because they have some gorgeous round watches with much less bezel than the Pebble Time Round. I own a round Huwawei watch with a metal band and get compliments on it all the time. https://www.android.com/wear/

Pebble bezel: http://i.imgur.com/xllAVAu.jpg

OP may not have, but I have. Near universal size for Android watches seems to be 42mm (and 12mm thick). Roughly that used to be a common size of pocket watch. I don't want a pocket watch on my wrist. Apart from anything else I'll be forever bashing it. I'd rather have a smart fob watch! :p

Pebble Time Round was around 36mm and 7.5mm thick. It actually looks like a normal watch on your wrist. With 3 times the battery of Android.

42mm isn't really outrageous for a wristwatch anymore. At least it's not a Diesel monstrosity.

True, and some fashion watches have got truly silly.

I think it's the combination of diameter and thickness. When I looked at an Android it was just that bit too imposing. If either dimension shrinks I'll look again.

I'm a larger guy and it's outrageous to me. I have had 2 Wear watches and both were too large. My Pebble Time is the perfect size... sadly I won't be getting my Time 2 to replace it.

That's awesome! I'm so glad you like the watch you have. However, in the future please keep in mind that just because someone has a different opinion than you doesn't mean that they're less up-to-date than you are. I've had hands-on time with just about every Android Wear watch released (including the Huawei Watch), and none come close to matching the Pebble Time Round's svelte 7.4mm thickness (save for the original ZenWatch which I also owned, but sadly that had a rectangular display).

Sadly pretty much none of the Android Wear or Samsung watches are small enough for anyone except large men to wear. The Gear S3 looks okay, but I simply cannot physically wear it. Huawei Watch is the same.

I 100% agree, the only reason I didn't get the pebble round was because the bezel was a little much, I was waiting for v2 that would hopefully solve that. Noise I'm left with a bunch of lackluster Android watches that won't work well with my iPhone and a ridiculously expensive Apple watch that looks like a phone on my wrist.

You might want to look at Fossil Android watches. I had one for a few days and I loved it but my Android Phone broke and I had to sent it back.

> Netherlands city of Delft, known more for pottery than technology

Perhaps this is true, but hopefully not any longer among HN readers:

- Antonie van Leeuwenhoek: world first microbiologist, huge improvements in the microscope

- Martinus Beijerinck: discoverer of the virus

- Produces the Nuna, which won the world solar challenge in Australia 5 times

Yes, as a Delft alumni, that remark hurt a little.

The Porceleyne Fles, the only remaining Delft blue manufacturer, is now a touristy place, employing probably less than 50 people.

The TU is one of the better universities in the Netherlands, employing almost 5000 people, and around 16.000 students.

If it's worth anything, this southern Californian thinks very highly of TU Delft. Their product design course on edX was a great little introduction to the field, and the only MOOC I've actually seen the whole way through!

Halfway through typing this comment I remembered that I indeed know of "Delft's blauw" (Delft's blue) which usually refers to a color used on pottery. So yes, I apparently do know Delft for its pottery, but much more for technology. Then again, I'm Dutch so I should know what goes on in cities here.

- List for what it's worth, 17th in Europe, 59th world-wide: https://www.timeshighereducation.com/student/best-universiti...

- Inventor of Bluetooth (Jaap Haartsen) https://en.wikipedia.org/wiki/Jaap_Haartsen

- M.C. Escher

Also, TU Delft is one of the best universities in the world at engineering/ product design.

I know about the city because Delft University of Technology has some courses on edX.

Erik Meijer is the first name that came to mind when I heard Delft.

Pretty sure NixOS came out of TU Delft too (and that they're still involved)

interesting how University of Waterloo was never mentioned given its heavy ties with YC, and that it was his main university.

Definitely knew Delft from Van Leeuwenhoek :) . I didn't know Beijerinck, and I had no idea the Nuna was from there.

- Sounds like it would be one of Terry Pratchett's characters


Am the only one around here that doesn't care one single bit about the fitness aspects?

My Pebble Time Steel broke (actually just the band), just before these announcements and I got a refund (spendable only at the company I bought the Pebble, but that's ok.) But I miss it! I miss the the notifications, I had gotten completely used to putting my Phone somewhere, anywhere withing BT range for the duration of the day. 99% of notifications do not require immediate attention (I also strictly filter what was allowed through to the watch) but some do and the ability to see that on your wrist is gold to me.

For now, sadly, there is no replacement that even comes close. I really want an always one screen and at least 5 days of battery life.

I absolutely agree. I backed Pebble the first and second time they were on Kickstarter but passed on round three because my Pebble Time Steel was still going strong and all the new features seemed to be focused on the fitness aspects to the point the "one more thing" reveal turned out to be a small headless device that is only really useful to runners.

Pebble was everything I wanted from a smartwatch:

* a water-resistant Android-compatible wrist-mounted bluetooth watch

* that shows me real-time notifications from my smartphone (but lets me filter notifications to kill the noise)

* that allows me to pause/resume smartphone audio

* that has an always-on display I can read in broad daylight

* and that can go a number of days without charging

Now that Pebble is gone, I'm regretting not having bought the Pebble 2 because I'm worried there's nothing I can replace my Pebble Time Steel with when the time comes.

I don't need nor want a fitness tracker -- I'm only interested in sleep tracking and I prefer charging my watch while I sleep. A heartrate monitor would be fun but just a gimmick.

Ironically I never had any use for wrist watches before I bought my first Pebble and now I feel naked without it. But I don't want to spend hundreds of dollars for something I really just want to tell me the time and buzz and show me notifications without having to pull my smartphone out.

I guess you and me are part of a very small group of users, sadly.

> For now, sadly, there is no replacement that even comes close. I really want an always one screen and at least 5 days of battery life.

Did you take a look at Vector Watch?

I did indeed, they look nice but a different price class (was going to get a Pebble 2 to replace the PTS1). For now they are also not sold in my country. they do tick the display and the battery (up to 30 days!) and water-resistant boxes. There are no apps but I don't care that much (though the ski and mtb apps I used on Pebble were nice). I also read somewhere there were some BT stability issues but I'd have to check again and there are always updates. I'd really like to play with one, see what the OS feels like.

I'll keep an eye on them, for now them may make it somewhat cheaper and somewhat smaller (half the battery life is still very nice) but definitely Vector comes closest to the Pebble indeed.

For those interested: http://vectorwatch.com/

"seller of over two million smartwatches"..."Pebble was losing money, with no profit in sight"

I honestly don't understand this line of thinking. Why not, you know, sell something for more than it costs?

That's the idea. But the "cost" of an item will depend on the number sold.

Let's assume that a company's yearly costs are $1 million. They will sell one widget a year. That widget will now "cost" more than $1 million if they want to be in the black. But if they will sell 1 million widgets, now one widget will "cost" more than $1. (There's a lot of slop here, as the marginal costs will have gone up since you greatly increased production.)

Basically, you have fixed costs, and when you sell many of a thing, you build in the fixed costs, along with the marginal unit cost, into the final price the consumer pays. The problem comes when the size of your market is such that the cost you would need to stay in the black is well more than any reasonable consumer would pay. In Pebble's situation, there surely would be a one-watch cost that would keep them in the black, but that number could be in the thousands or tens-of-thousands. That's when you, as the CEO, start to think about shutting down the business, because that unit cost would be absurd.

I think you may be thinking of the "cost" of the watch as the marginal cost it takes to pump out one more from a production line. But you also have to take into account all of the fixed costs (software developers, administrators, server infrastructure, getting the production line ready, etc).

This is why some startups report being "contribution margin positive". That is to say: the unit economics of selling a widget are profitable when you consider the direct cost of sales (usually some combination of: marketing, components and materials, projected lifetime cost to serve if there's any subscription component), but excluding the significant central office costs.

E.g. Tesla. To be fair, a lot of their "central office cost" is R&D, but that was also probably true for Pebble.

I'm sure their unit costs were lower than their unit revenues, but it was the R & D costs that did them in.

They couldn't just charge more to cover R & D, because you need to hit a price point that your target audience will pay.

They could have gone for a higher price point, but then they're competing more directly with Apple and other premium brands like Gamin.

Investing in R & D to fuel future growth is a normal and reasonable thing to do. It just didn't work out for them, as it turned out the overall market for this product category isn't growing as fast as early indications suggested it would.

Economy of scale. As a comparison, Fitbit has sold more than 38 million devices worldwide since 2010[1].

[1] https://www.statista.com/topics/2595/fitbit/

Do you have any insight on what their return rate is? Judging by the Amazon reviews it must be somewhere (far!) north of 50%.

Also note that Fitbit can cover some of its costs (or enhance its profits, however you look at it) by wholesale spying upon its users.

Pebble was profitable for a time but if you have fixed costs and not the sales to make it up then you have a problem. It's pretty naive to think that "sell something for more than it costs" is reasonable advice here.

"Pebble was profitable for a time"

must've been a fun couple of hours

The article explained they dropped into the red in 2015 so I'm assuming that means they were profitable in 2014. Curious if they were profitable in 2013 as well.

They originally launched in 2012 so I don't think your "couple of hours" are likely fair.

"Perceived value is the worth that a product or service has in the mind of the consumer. For the most part, consumers are unaware of the true cost of production for the products they buy; instead, they simply have an internal feeling for how much certain products are worth to them." [1]

Some times you just can't sell an item for more than it costs. This is particularly true for technology companies who are pushing the envelop on the technology front. For example, the EO-444 tablet sold for $2000 in 1993.

[1] www.investopedia.com/terms/p/perceived-value.asp [2] http://www.oldcomputers.net/eo-440.html

You lose money on every unit but make it up in volume!

You still lose money that way. The volume gain is often not enough to offset lackluster sales.

(Chinese can outcompete you on price, always.)

They were profitable for a lot of their lifetime and then they weren't.

But you need to grow as rapidly as possible and own the market because everything in the world works exactly like a social networking web startup.

like uber does?

I can understand uber, where there are network effects at play as well as ongoing lifetime value from a customer. But this doesn't seem to apply to a watch where you'll maybe buy 1 every 2 years?

Dang, I guess they just never thought of that.

I own a Pebble Time Steel. It is wonderful. People really underestimate the impact battery life has. I get annoyed when I finally have to take it out to charge (about once a week). Heck, right now it's at 10% and I don't really care. It didn't even tell me yet when it's expected to run out.

The screen may not be as gorgeous as a phone screen, but it is on all the time.

It's also very developer friendly. Heck, you can even create watchfaces in Javascript.

Before the acquisition, I would not trade it for the first generation Apple Watch. Maybe the second one, just maybe, if the community does not find a way to keep the current Pebble devices running.

> I own a Pebble Time Steel. It is wonderful. People really underestimate the impact battery life has. I get annoyed when I finally have to take it out to charge (about once a week). Heck, right now it's at 10% and I don't really care. It didn't even tell me yet when it's expected to run out.

And I don't know if it still has this feature, but the OS had something that when it was really close to dying it'd switch off all the bluetooth and smarter bits and display a basic watchface, so it'd keep working as a watch for a few more days. That was awesome.

> It's also very developer friendly. Heck, you can even create watchfaces in Javascript.

Something that really attracted me to pebble was just how easily I could make a simple app and get it loaded on my watch.

> [He considered] bringing the company down to 10 people and just seeing what would be next.

Other than the fact that he would need to fire everybody, what is wrong with reducing costs to make it profitable like this? The problem seems like there wasn't enough profit to support a staff of 120 people. I can't imagine the VCs would object. They already lost their money.

There's a bunch of problems here. For a start, laying off the team is probably the worst thing a startup founder wants to do - he likely wants to protect them and so sending them as a unit to FitBit is better. But if we was to go down to 10 people, then if he sent the rest to FitBit they'd be competing against the current team! So he's given the choice of the company succeeding or the employees finding a new home with little disruption.

Secondly, the cap table is probably fucked. It's hard to go down to a 10 person company without fixing the cap table. It's probably something like VCs own 55%, founders 25%, employees 20%. So for it to "behave" like a 10 person company, you want to recap it and make it more like a Series A company (investors 35%, founders 50%, remaining employees 15%). If you don't it's shitty for the founders and remaining employees.

If you do, it's shitty for investors. Who wants stock in a Series A company at Series C prices? They wouldn't even have product market fit. And given they have the option to get their money back instead, I'd wager they'd all vote to sell.

A final reason is that the culture of a company changes as it grows. They'll currently have a "big company" mentality. They'd have to switch to a "small startup" mentality, which might be tough: they might not even have "small startup" employees left (it's not uncommon to see early employees leave when the company gets too big for them to enjoy).

Whereas if he starts a new company, he'll find it really easy to raise money, he can probably pull away the employees that he needs from FitBit, and he'll own almost all of it.

I agree with you, finding jobs for ~50 of the 120 employees is better than firing 110 of them.

The investors aren't getting their money back no matter what the cap table looks like now. Pebble went bankrupt. The founders are also walking away with nothing. No money from selling the company but also no debt - that's the benefit of limited liability.

I thought the company sold assets to FitBit. I saw a $40m number floating around. While that might be golden handcuffs for employees, I would typically expect to see the investors take some cash out of this.

If there was $40m, it's likely the founder got _something_, even if it's just 200k. There has to be financial incentive for him not to burn it to the ground, and the VCs probably don't want to get a founder-unfriendly reputation over a "small" chunk of cash.

Pebble's debts exceed $40M. The asset sale was for $34~40M. They're in bankruptcy proceedings: http://www.proofofclaims.com/PebbleTech/documents/

The financial and legal incentive is not going to jail and not being personally liable for any of the company's debts.

I'm currently working for a company in that situation, and its a tough sell to both investors and employees. I don't regret my decision, but its really difficult supporting the infrastructure built up by a developed company with the resources available to an early stage startup.

If you're essentially getting rid of your whole R&D and marketing team, which you would be at that size, you're basically into eating your seed-corn. Yes, the company might be profitable for the remainder of the life of your current products but then what? You'd be into the same situation 18 months from now, except with an eroded brand and outdated products.

I'm going to assume he didn't want to continue with it anymore otherwise he certainly would have done that.

They'd rather it shut down completely so they don't have to give it any more attention.

>... was the company’s willingness to keep Pebble’s developers and users in the game.

You mean like dropping warranty support and a vague statement about cloud based features degrading over an undisclosed amount of time?

As a Fitbit user I'm so very happy to hear that Pebble's developers are going to Fitbit! Fitbit's software ecosystem is bad. I have many Fitbits (Fitbites?) and I've stopped using them because the app and website are "meh" at best.

Perhaps you have enough for a Fitnibble or a Fitbyte

> I have many Fitbits (Fitbites?) and I've stopped using them because the app and website are "meh" at best.

I'm curious about this. If the app and website are bad enough to stop using them, why do you have multiple? I would have expected the issues would be noticeable with just the first device.

The products themselves work great. They track everything with great accuracy. ... The problem came when it was time to analyse that data. I was tempted to use their developer tools to extract my data as .csv and build my own app but simply gave up using them.

You would prefer that they not provide a warning at all, or lie and say cloud services are supported forever when they'll almost certainly be cut in a year or two? That seems to be the typical playbook for acquisitions and I much prefer the way Pebble is doing it.

I would prefer they open up the services-side so that it would be possible to at least extend the lifetime of things a bit.

When you are going down, there is only a limited amount of bargaining power you have. They did the best they could.

But Citizen had offered them a better deal, didn't they? $740m rather than $40m. [1]

[1] https://techcrunch.com/2016/11/30/fitbit-pebble/

This exactly. And he turned it down. This is nowhere mentioned in his interview and it's an important point of his own failure as a CEO.

He thought he could make a better deal back in the good days, overestimating the value of his company and NOT selling when the time is right. I don't buy it that he sold to Fitbit because Fitbit promised to keep the employees, this is exactly the bullshit I expect him to say to an interview to paint his story a courageous one.

Pebble was an amazing startup with a lot of potential and good ideas (I find their short developer manual in C as one of the best introductions to C programming with practical examples ever written), but the CEO overestimated his company's maturity and value. Which is a shame. Let's hope Fitbit keeps alive some of the legacy.

I haven't been able to find any substantiated source for the $740M figure. All the other news sites cite an article on The Information[1] about the FitBit deal which is paywalled.

[1] https://www.theinformation.com/fitbit-to-buy-pebble

You know what they say about hindsight and perfect vision.

Sounds like Eric thought the company could have survived. I give him props for sticking with it as long as possible.

He must be feeling like killing himself now! wow! $740M!!! and instead now he heads back to YC as yet another partner. I'd really be curious to see YCs cap table :) Sam must have that locked up somewhere :)

The Smartwatch as a concept is a good one, however the current offerings have one of two problems:

Pebble's problem is the lack of features, and specific to users of iOS like myself, relative instability and weirdness when it comes to important things like notifications. The monochrome screen is also less attractive though IMO bearable.

Apple Watch's problem is battery life. It's absolutely unattractive to me to have yet another thing I need to charge once a day. It wins on pretty much everything else but such a low battery life is crippling to this sort of device.

I feel like between the two you have a rough approximation of the laptop offerings of the early 80's. Yes, they did exist and some people used them, but by and large they were terrible for the functions they were built for. I have a feeling in not even that much time, we'll have proper smart watches with good integration across platforms that will have a screen like Apple's and the life of a Pebble, but for now, laying out $250 for what's basically a bleeding edge prototype is unattractive to the mainstream consumer.

Edit: Question for HN: Would you all consider a Fitbit to be a smartwatch? I mean it's a watch-esque device that does more intelligent things than just a regular watch but I feel like that's more of a wearable monitoring device.

Honestly the Pebble is perfect because it's so stripped down. It does exactly what I want it to do which is show me notifications, the time, track my sleep, let me set timers and press next in spotify without pulling my phone out of my pocket. It does all of this with a battery that I charge once a week. I'm very sad Pebble is gone.

I'm a 100% with you. If I need advanced features my phone is right in my pocket. Timers, notifications, Spotify is perfectly handler with the always on display, week long battery life.

I got the Pebble 2 from Kickstarter, having also ordered the Time 2, and was blown away by how sharp the P2 screen is -monochrome and all. Very sad I won't get the new Time 2, as I felt the Pebble Time Steel display was a step backwards from the OG Steel in terms of readability.

My first reaction to the news was to locate a white P2 on Amazon to replace my wife's Pebble Time. Hope to get it just in time for Christmas.

I'm still very sad about how it all panned out, for the team and all the loyal fans, and selfishly so mostly because I won't see the Time 2 - not only would the display be a massive improvement, but CPU and memory also.

I've found that the battery life issue has been largely overblown, especially with the Apple Watch Series 2. On most days (all features enabled, moderate app usage, no GPS usage) I still have between 65% - 75% of battery life remaining.

Even if the battery life wasn't that good, is it really that hard to take your watch off before bed and set it on a magnetic charger? I've worn watches my whole life and have never slept with them on.

I take it you aren't interested in sleep tracking? I find it helpful to know how much "deep" sleep I've gotten -- and it does tend to correlate with how I feel the next day.

But as long as it lasts for more than a day, and if it charges fast enough, you could always charge it in the car on the way to work. Or charge it while in morning while in the shower.

I've never tried using my Apple Watch 2 for sleep tracking as it's usually only around 50-60% at the end of the day, and it's 'best' to charge at night. Granted, I'm already wearing a Fitbit Charge HR and have a Hello Sense sleep tracker as well.

I've also noticed on the odd occasion where i sleep with my apple watch on, the screen lights up too frequently as i roll over. The fitbit does that too, but isn't as bright.

Anyway, if you can barely/hopefully survive 2 days with it, it means you really need to charge it daily. Again, something I'd rather do while sleeping than at my desk.

I know people who use the Apple Watch for that. The battery is small enough that they let it barge twice a day (when getting ready in the morning, some time in the evening) that it tops up to 100% in a short amount of time.

Being a sysadmin having the thing on my wrist overnight is the best use case for me to have it, that way if I get alerts in the night I can have it vibrate so I don't wake the wife.

In all likelihood I would charge it at work, not at home. But I get what you're saying, that's interesting.

Sleep tracking is one of the features that pebble users fawn over. Charging overnight prevents that use case.

It doesn't actually need to charge overnight.

You can get by with wearing an apple watch while you sleep. It charges mostly to full in about the time it takes for a morning shower.

I want to use a watch with sleep tracking, obviously I can't do that if I'm taking it off every night to charge it.

People do use them for sleep tracking. Take it off a half hour before bed, charge it. Put it back on the charger in the morning for a while, and it's good to go.

I charge my FitBit Blaze when I'm showering and getting ready in the morning and that's enough to get it back to 100% each morning.

Same with the Apple watch.

>The monochrome screen is also less attractive though IMO bearable.

The (colour-screen) Pebble Time and Time Steel have been on the market for about 1.5-2 years now, and also included a microphone for relaying voice commands to your phone. The Pebble 2 would've included all of this, plus a larger screen. It managed to preserve a battery life of (easily) the better part of a week.

RE your question: the FitBit isn't a smartwatch. It's designed around a single function (fitness monitoring).

Pebble 2 shipped, btw.

My mistake!

Your statement is correct about the Pebble Time 2 though (Pebble Time ~ higher end of the Pebble line)

> the FitBit isn't a smartwatch. It's designed around a single function (fitness monitoring)

While that is true of most FitBit models, the FitBit Charge 2 has some smartwatch features like notifications.

Same of the FitBit Blaze. I'm quite happy with my Blaze. It does notifications (email, call, sms/iMessage, apps) and music control as well. Battery life has been pretty good, though it doesn't really matter, I simply charge it when I'm in the shower and getting ready in the morning, and that's enough to get me back to 100% battery each morning.

Would you all consider a Fitbit to be a smartwatch?

I would, which is why I wear a Garmin now despite having backed two Pebble Kickstarters. AFAIK, a FitBit does everything the original Pebble did, which was mainly put notifications on your wrist. I know my Garmin does everything that the original Pebble did (mainly notifications), and I can use it when I go running without having to bring my phone.

So, yeah, in comparison the original Pebble, FitBit is a smartwatch as defined by the smartwatch market in its current state. That doesn't mean that I don't think it's early days, just as you with your laptop comparison.

which garmin do you wear?

Fenix HR. But I think most of Garmin's line has at least some basic notification functionality, even down to the inexpensive Vivo line.

Fenix HR specifically because trail runner (need the extra battery for those really long runs), hiker (alt/bar/compass is nice), and all-around outdoorsy guy (device signals my outdoorsiness), in case that was the nature of your question.

I was planning on getting the Pebble 2 sometime next spring as a replacement for my current Pebble Time. So I've been comparing what's out there. My phone is Android, so that leaves out the Apple watch. Also, not impressed with Android Wear watches.

It looks like the Samsung Gear S3 comes pretty close -- it runs Tizen (which is derived from Nokia's Maemo), so it looks like it should be easy to develop for. Also has an always-on screen, and "up to" a 3-day battery life.

I just wish they could make a screen that looks as good as AMOLED, but was passively illuminated during the daytime.

I moved from a Pebble Time to a Gear S2 and my experience has been overall pretty positive. A few things I've noticed:

- battery life is very good compared to apple/android. I can usually get 2-3 full days of regular use with the ambient display on.

- It looks way more like a regular watch, most people don't notice unless you start using it. It also fits a lot better on my smaller wrist.

- The screen is amazing indoors, meh outdoors. Kind of the opposite of what I experienced with the pebble.

- Very limited app selection. I don't actually use any apps besides what it came with, and even then I think all I use is just the calendar and weather. I mostly have it for the notifications, which work extremely well, so I don't really care about that. Might be a bigger deal for you.

Thanks, that is really good information. I originally had a basic Fitbit (work was giving them out), got addicted to the fitness / sleep tracking, but wanted to upgrade to something that showed time and give notifications (I frequently miss text messages because I don't hear or feel the phone in my pocket all the time) -- so I got the Pebble. The apps I don't use that much, although there is one Weather-related watch face on the Pebble that I don't think I could live without. It shows a graph of the temperature and chance of rain for the next several hours, and has a mini calendar on it with color dots next to each day representing sunny, cloudy, rain or snow. Makes it real easy to tell at a glance what is coming up weather-wise.

If you've considered an Apple Watch then I'll give my requisite recommendation to look at a Garmin. It won't have quite the features that the Apple watch does - but it's perfectly usable as a standalone device, has a battery life long enough that I don't even think about it (think week(s)), and has amazing built-in GPS.

It can potentially be more expensive than a Pebble, but competitive with an Apple watch, if not cheaper (depending on model). As a fitness tracker and notification machine I'd say it's superior to an Apple Watch - I haven't had an Apple Watch but have had android wear devices which seem to be about the same in terms of battery life and functionality.

The "watch with largish LiIon battery" market is very odd. Nobody seems to have any clue what the market wants or what the market is. The only company doing reliably well is Garmin, who just iterated on their sports watches with low hanging fruit like smartphone notifications or step counters (one of the most bizarre features).

Everyone else is just in a drunken random walk. So now there are watches that waste lots of battery on recording rough HR all day but totally fail reliably capturing HR during sport activities. I have no clue what they think that is doing, utterly useless.

According to most on-wrist HR device reviews I've seen (for example, dcrainmaker), the on-wrist devices work just fine but filter 'noise' too aggressively to accurately capture your abrupt heart rate fall when doing intervals. For most people, this is 'good enough'. I have an AppleWatch2, Fitbit Charge HR, and a Suunto Ambit that uses a chest strap. To be honest, the chest strap is unreliable enough that I don't think I'd say that system works better than the on-wrist devices.

I've owned a Pebble Time since that kickstarter and I've found that all I use it for is:

* Telling the time

* Tracking my activity level

* Tracking my sleep

* Timer and occasionally a smart Alarm

* Letting me see my motivations without pulling my phone out.

* changing volume/track on spotify.

The fitbit charge 2 has most of those features, the main thing it's lacking are timer, smart alarm, spotify control and the more advanced alerts (apparently it only does text/calls and calendar). All those missing features are software features rather than hardware features, I kind of expect fitbit acquired pebble so it could get some of that technology.

I was quite emotional the day I learned Pebble was RIP while from this article it seems the CEO gave a good shot to do the best for his customers and employees.

Alas, nothing can replace it (yet)

My Pebble Classic (!) can do:

* Time/Date (with many watchfaces) * Calendar * Weather * Stepcounter * Sleep tracker * Alarms, Timers, and Stopwatch (smart alarm for sleep, other ones useful in the kitchen) * HRM (via SimplyHRM or Strava) * Running/bike tracking (native or e.g. w/Strava) * Music control (Spotify, awesome during sports) * Google Maps support (also with navigation) * 2FA HOTP * Oh, and notifications (w/filters) * With recharging once a week. Which also means the battery is gonna last, unlike those watches who recharge daily. * Works under shower, too. * And all this, for the price of ~100 EUR (a few EUR for some of the above apps).

My Pebble had the dreaded graphics issue. Pebble 2 has build-in HRM, but it isn't as accurate as my Polar H7. Pebble 2 has a crystal clear screen, the design looks more professional, and the wristband is better than the previous iteration.

The only thing I've never quite been able to set up, is managing a shopping list for in the grocery store (just with the ability to flag what is done). I miss such a feature so much! Using my smartphone for this is a ticking timebomb. One day, a kid is just gonna bump into me and poof its gonna drop on the floor. Won't happen with a smartwatch. And that is a use case right there, one no other device than a smartwatch can fulfill.

I admit, smartwatch use cases right now are niches, but that doesn't mean they're irrelevant. Plus, in The Netherlands it is going to be illegal to use a smartphone on the bike. A smartphone is far more safe, and it won't drop. Being attached on the wrist has a clear advantage for use cases like these.

One disadvantage is information leaking. Although smartphones are also vulnerable to that.

Fitbit Blaze also shows notifications from apps you select.

Looks like it also has music control too.

But I'm not sure how they manage to claim a 5 day with a color LCD display, I guess I should add the "always on display" to the list of pebble features I used.

Just picked up an Alta, I'd say its a smart watch-light.

I wouldn't get a full smart watch, probably ever. I don't need a full screen on my wrist. For me, the killer features are: Tracks my steps/motion, tells time, vibration alerts and alarms.

If they can keep making it smaller / more like a wrist band, I'll buy each new version that comes out.

I want something small/subtle, not packed with features.

> The monochrome screen is also less attractive though IMO bearable.

True. But the color is very nice. It's a bit washed out when the backlight is on, but ok.

For me the problem with smart watches is that they're not independent devices. If you have to carry a phone anyway, what's the point in an accessory to the phone which duplicates the functions on a smaller screen?

The only use I found for the ones I've tried was glancing at text messages rather than taking out the phone, but even that let's people more easily interrupt me...

Being a user of a six plus, where getting my phone out of my pocket can be an issue, the convenience of having it on my wrist is huge. Just not huge enough to currently overcome the inconveniences.

Hey word on the street is Fitbit didn't take many of the hardware people from Pebble. (Not sure why?) But if you're a hardware person from pebble reading this then reach out to me, I'd love to take you out for coffee and have a chat! :)

Perhaps they should; Fitbit's hardware is terrible. I bought two Fitbit watches, one after the other, and after they both fell apart within 6 months I forswore them altogether. Their software is bad, too, but the hardware was the killer.

And I bought my fitbit when it came out and it still looks brand new. I wear it everyday. What sucks is not the hardware, it's their software.

Thousands of people have had syncing issues for a long time, seems like they've fixed most of it now but I guess there is reason to believe it could happen again.

The glue on the Charge and Charge HR kept breaking down and the thing would gradually peel away from the plastic until it literally fell apart.

There is only so many hardware people you need, FitBit already has a bunch of different watch models that all seem to do the same thing. They could do with less.

Meanwhile all of the smartwatch companies are desperately looking to move from a commodity hardware model to services with recurring revenue, i.e. software.

> Meanwhile all of the smartwatch companies are desperately looking to move from a commodity hardware model to services with recurring revenue, i.e. software.

Which is funny, because turning my watch into a subscription service that won't work without an always-on internet connection is precisely what I don't want.

This industry-wide trend from products to everything-as-a-subscription-service may be nice for developers craving job security but it's awful for end users.

IMHO they were mostly interested in the OS and the development platform

I have to ask: were 160, then 120 people really necessary?

Judging by their Kickstarters' successes, Pebble had made "something people want", and they had made it repeatedly. Couldn't they have waited out the bad times with a lighter team, while tweaking the products and remaining profitable or at least just above zero?

120 people sounds enormous to me -- esp. given that all manufacturing was outsourced...?

Interfacing with retailer buyers is labor intensive and they were trying to sell pebbles everywhere. So you have like one employee-equivalent (across multiple departments) per major client (amazon, target, walmart) and maybe half an employee per minor retailer and you can easily use maybe 30 employees just keeping the retailers entertained. Even if you only sell one unit to walmart it still costs you like one employee-equivalent just to keep the monster fed with paperwork and contracts.

Also hardware has very expensive customer support costs, lets say they had 1e6 sales and fifty customer support (to keep the math easy) and lets say a typical customer support dude burns an hour per ticket total (including training and everything back office) and works 2000 hours per year, thats 100000 or 1e5 customer service interactions per year. Thats only a 10% support rate. Of course the annual rate was probably much lower than 10%, and they probably had a lot less than 50 customer service employees, but you can see how selling consumer hardware can be incredibly expensive. Its very difficult to have a million units out there with fewer than say five people baby sitting them.

There's also the SV stereotype that it takes about Y folks in SV to do what 1 person in Chicago would do, where the value of Y is extremely debatable but certainly larger than 1. The nicest way to put it is if it takes six months to soak in the culture and we intend to double in size and sales every six months then need a team twice as big as it "needs" to be today to be ready in six months, and of course six months from now the team will have doubled again to keep up with the onramp to the next doubling 12 months out, etc. Of course when the growth rate doesn't achieve or flatlines or goes negative for a couple quarters then you have like ten people to do a one person job, so all sad company stories end this way, with why do you have 10M units worth of employees with only 1M sales, no wonder, blah blah.

Thank you for these, they're very enlightening.

What was the point of having a strong retail distribution, though, esp. given the nature of the product and its target market? If it's on Amazon why would it need to be available at Target or Walmart? Also, when you're small, keeping stock with big retailers can be very costly, not just in headcount but in cash.

If this was indeed part of their strategy it's weird.

Wow I had no idea they were so "bloated" (for lack of a better word), and it looks like most were in Palo Alto! That's just insane.

I've never owned or used a Pebble, but for me it's poignant that this coincides with my decision to stop wearing a Withings Activite and dusted off my trusty old Seiko 5.

This shift was primarily motivated by two factors:

  1. I lost interest in the activity tracking features.
  2. Even worrying about the battery once every 6 months was too much.
And supplemented by a third, which is that the fancy watch wasn't very readable and lacked a second hand. That made it less capable at the main thing I use it for: keeping track of the time.

I looked hard at a Pebble at one point before deciding that, since my phone is almost always in my pocket or on the table in front of me, getting it into position for viewing information would take only nominally more effort and probably gets me to a place where I can act on whatever information the device is telling me much more efficiently. Also, having a non-user-replaceable battery means that the device will only live for so long, and I'm really trying to limit my consumption of disposable technology.

I think that, for now, my most optimistic case for smartwatches is that they're at about the same phase as handheld computing was 15 or so years ago. The technology is really interesting, but there needs to be more technology development and ironing out of subtle details before the idea is quite ready to take over the consumer market.

> Apple’s emphasis on fashion and Pebble’s on productivity and third-party innovation were costly detours—the smartwatch market is rooted in health and fitness.

I'm not sure this is accurate. Pebble sold relatively well. They just couldn't get more customers beyond a certain point. It's a niche market.

Fitness trackers become obsolete quickly. They tend to be relatively cheap and there are a lot of sensors and software that can be iterated on to justify selling newer versions of the same product every year to the same people.

When the Pebble Steel came out, I gave my original Pebble away. The only reason I switched was that I liked the design of the new one better, the original still worked just as well as the new one.

When the Pebble Time Steel came out, I switched again and again the one I had at the time worked fine. The Pebble Time Steel had some new features but mostly it did much of the same.

I passed when the Pebble 2 came out because I couldn't justify paying again for a replacement to something that still worked as good as on the first day. The Pebble 2 brought some fitness features but was otherwise no different from what I already had.

Fitness trackers have planned obsolescence. The tech becomes outdated very quickly and the conditions in which they are used lend themselves to natural wear and tear. Utilitarian smartwatches on the other hand are expected to last.

Pebble sold me three smartwatches in almost as many years. They actually marketed four[0] more in that time. They oversaturated the market and grossly overestimated the demand.

Their first Kickstarter generated $10MM, their second in early 2015 generated $20MM, their third generated $12MM. Considering they were falling in the red in 2015 and their 2016 campaign was doubling down on the fitness aspect and bombed in comparison to 2015, I don't buy the narrative that fitness tracking would have been a better focus.

[0]: To recap: Pebble, Pebble Steel, Pebble Time, Pebble Time Steel, Pebble Time Round, Pebble 2, Time 2 and Pebble Core (which is not a smartwatch). The 2016 Kickstarter also saw the edition of silver/gold editions of the Pebble Round but those seem otherwise identical to the original.

Yeah I don't know if it's right to say that the market is "rooted" in that segment it seems like it's easier to make money there for a variety of reasons.

Something like 80% of the market is special purpose wearables like Fitbits vs. 20% smart watches like Pebble and Apple.

One of the only companies in the segment that had good results in 2016 was Garmin which focuses on activity watches.

The fitness and activity tracker segment has several advantages:

-there's an obvious benefit to being wearable, so they're not competing directly with smartphones.

-they're selling into a rapidly growing market for "lifestyle" accessories.

-precisely that obsolescence that you mentioned means they can keep selling to existing customers.

-many people who use them get addicted to the gamification aspect of fitness tracking and will immediately replace broken items.

-sports equipment is expected to wear out in a way that premium watches are not, so watches that break after a year or two do not leave as much of a negative perception with customers.

ISTM the many screen-on-wrist testimonials on this page confirm a longstanding prediction of mine: the "smartphone" is not the ultimate device form that our children will be using as adults. Instead, every personal item will become part of a personal constellation of devices. Phones will gradually disappear as better (i.e. ubiquitous, low-power, and basically free) wireless networks emerge, and our eyeglasses will talk to our hats which will talk to our shoes which will talk to our wrist devices...

> Apple’s emphasis on fashion and Pebble’s on productivity and third-party innovation were costly detours—the smartwatch market is rooted in health and fitness.

Over the last few years, I noticed store catalogs giving much space to fitbit, and little to pebble (or apple watch).

Perhaps this is a crude exoscope, for viewing outside the bubble/RDF? Like Buffett observing people still actually using American Express, outside Wall Street's gloom.

Those catalogs now include iPhone 5s and Samsung Galaxy S5 alongside the flagships, suggesting "good enough" and flagships have overshot...

Where will the tech, talent and investment go, if smart phones and watches are good enough, and VR/AR is a wash?

> Where will the tech, talent and investment go, if smart phones and watches are good enough, and VR/AR is a wash?

Cloud services, I guess? They seem to be doing well enough to last until the next "big thing" comes along.

Only 30, Migicovsky has plenty of time for future glories. And plenty of leftover watches to keep that time.


TLDR: Because it was either that or shutting down (either completely, or with such a massive downsize that it would have been effectively the same thing).

I'd be interested to know what he did get out of the deal. Sold for "south of $40M" and with the statement, "He’s not leaving Pebble as a wealthy man."

Wealthy relative to startups, or relative to the real world?

relative to how much debt he had to pay off?

$40MM wouldn't be much buffer for a product that was about to go into manufacturing and distribution I would have thought?

I.e. all the costs of design, development and planning are sunk. And they didn't get to the stage of selling them to recoup any of that.

My guess is most/all of that money went into paying off suppliers and debt.

But he isn't personally responsible for that debt. As CEO, he could have drawn enough salary to build a decent sized nest egg, where he isn't immediately looking for a job.

Also mentioned in the article is that Pebble is still responsible for their own debts.

can someone summarize this for me? (I imagine the obvious actual answer to the headline is, "I'm passionate about having a place to live, eating, travelling and otherwise enjoying the results of 300 years of capitalism and industrialization.")


EDIT: Thanks for the downvote. Can I have the summary, please?

From someone else's comment:

> TLDR: Because it was either that or shutting down (either completely, or with such a massive downsize that it would have been effectively the same thing).


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